Exclusive: The Secret Madoff Prison Letters

Diana B. Henriques
, ContributorI wrote the book on Bernie Madoff. Literally.Opinions expressed by Forbes Contributors are their own.

This article appears in the April 9 issue of Forbes Magazine.

Bernie Madoff hated e-mail. He rarely used it at his high-tech Wall Street trading firm. When others did, he fretted about the trail it left behind. He wasn’t crazy about letters, either. A staffer had standing orders to destroy his correspondence with one important client. Even after December 2008, when the world learned that ­Madoff had run the largest Ponzi scheme in history, few personal letters surfaced. He always preferred to deal with people face-to-face.

But early in his 150-year prison sentence that all changed. His wife, Ruth, stopped visiting. His estranged older son, Mark, committed suicide; his surviving son, Andrew, never visited and swore he never would. His encounters with the world beyond the prison’s razor-wire perimeter shrank down to occasional meetings with lawyers.

In September 2010, in the first months of this intensifying isolation, Bernie Madoff became my pen pal--forced by captivity to rely almost entirely on e-mail and letters to carry out his last, desperate mission.

That mission: rewriting history--his own history. Where better to start than with his biographer?

I first interviewed Madoff in person at the medium-security prison in Butner, N.C. in August 2010 for my book The Wizard of Lies (Times Books, 2011). It traces the roots of his dishonesty to 1962 and details his many cliff-hanger escapes from detection, his precipitous downfall in 2008 and the epic legal struggle over the wreckage he left behind.

After that first visit--I saw him again early last year-- we began to exchange letters. Soon Madoff enrolled me in the closed prison e-mail system. We have corresponded ever since, at least monthly, more often weekly, sometimes several times a day.

At first he simply responded to follow-up questions for my book. But even after The Wizard came out in hardcover last spring, his need to reach out has continued. Perhaps he believes he can use me to “set the record straight,” despite our profound disagreements about what that record is. Maybe he is trying to paint a more bearable portrait of himself in his own mind, and our correspondence is just a tool for doing that.

Whatever his motives, he displays the same talent for manipulation, deception and delusion that served him so well in his criminal life. Sometimes he transforms himself into a victim--the dupe of malevolent clients or prosecutors. One of his biggest regrets, he tells me, is not having gone to trial to tell his side; it seems not to have occurred to him that he would have been publicly eviscerated in court. He mentions repeatedly, and seriously, that he stands ready to advise lawmakers on regulatory reform. The offer’s absurdity escapes his stunted sense of irony.

He remains obsessed about his image. He insists that he was once an honest and successful trader, before unscrupulous clients--people, he says, “I foolishly trusted”--forced him to take on losses, then failed to make him whole on deals gone bad. As a result, he argues, he sank into crime. When did this take place? Madoff is fuzzy about actual details, calling it his “riddle.” It occurred, he says, sometime after the 1987 market crash, but before 1992, when he claims his Ponzi scheme began.

Madoff dishes out a lot of blame, heaping little on himself. He reserves special contempt for feeder-fund managers who invested with him and bankers who handled their accounts: Their over-the-top greed, he suggests, blinded them to obvious signs of fraud--and, therefore, they deserved their fates. Others come off as fools who cannot grasp the basics of a trader’s life--chief among them Irving H. Picard, the bankruptcy trustee trying to track the cash that flowed through his fraud and distribute it to its rightful owners.

If people could only understand him, Madoff seems to be saying, they might not demonize him. He starts an Oct. 11, 2011 e-mail to me this way: “I hope you understand that I am in no way trying to rationalize my terrible behavior.” A ray of conscience? Hardly. Near the end of that e-mail the clouds of self-deception close in again, and Madoff turns himself into a pitiful martyr: “I made the tragic mistake of trying to change the way money was managed and was successful at the start, but lost my way after a while and refused to admit that I failed at one point.”